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South Central Iowa | Definitely, I think we see the same situation as last summer where we advance to $12.00 until more is known. The market likes to find the middle ground before an unexpected event and summer weather is the most unexpected. Then it is either $3 up to $15 or $3 down to $9; although I might be more in the camp of $11.50 +/- $2.00 after right now. The same situation occurred in corn the last two years: trade to $4.50 because it is either $1 up to $5.50 or $1 down to $3.50.
I'm not buying the great acre switch either. We need 88-89 million acres of soybeans. At 88 million acres, that would be 87 million harvested. With a trend yield of 47.5, national production would be 4,140. We are projecting 4,108 usage in 16-17 and I am seeing a lot of estimates for 17-18 around 4,200. So trend yield on a high acre switch could still be a deficit of 60 mb. If our carry-in is 280 mb as the seasonally adjusted export pace has us heading to, that will put our 17-18 carryout at 220 mb, a 5% stock use. Trend line on 86 million acres, 85 harvested, would drop our carryout to 115 mb. There would be price rationing at that point. What if we produce a sub-trend yield or don't switch 4 million plus acres? A lot of people don't like soybeans as much, and like you say, a $10 soy vs $3.85 corn is not buying acres. | |
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Throwin' Bones! Soy and Corn
